Kurukshetra Magazine September 2023 - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

 Page 1


Kurukshetra       September  2023 22
BS Purkyastha
P
The author is a Delhi based journalist. Email: ideainks2020@gmail.com 
The PLI Scheme 2.0 for IT Hardware is targeting total production worth Rs. 3.35 lakh crore 
and additional investment of Rs. 2,430 crore in electronics manufacturing 
India
Hub for Electronics Manufacturing
March 2023, electronic exports have become the sixth 
largest export commodity group. The target of the 
Government is to increase electronics manufacturing 
capacity to Rs. 24 lakh crore by 2025-26, which will 
also help create over 10 lakh jobs. 
Early signs of success
Today, the telecom & allied industries are among 
the top employment generators in India. From just 
two mobile phone factories in 2014, India has now 
become the second largest mobile phone producer 
in the world. Exports of mobile phones crossed a 
major milestone of $ 11 billion in 2022-23 (about Rs. 
90,000 crore). PLI Scheme for Large-Scale Electronics 
Manufacturing (LSEM) along with existing 
Phased Manufacturing Program (PMP) 
has led to increased value addition 
in the electronics sector 
and in smartphone 
manufacturing, by 
23% and 20%, 
r e spe c tiv e ly, 
from negligible 
in 2014-15. 
rime Minister Narendra Modi’s visit 
to the United States in June 2023 
coincided with US-headquartered 
Micron’s announcement to build a $ 2.7-billion 
semiconductor assembly and testing plant in India. 
The plant will produce its first chip in six quarters, i.e., 
in December 2024, creating 5,000 direct and 15,000 
indirect jobs. In the last two years or so, several 
companies, from Apple to Wistron to Foxconn, have 
firmed up plans to set up factories in India, as they 
broaden their supply chains across the globe. In 
July, news broke that US-based solar manufacturing 
company, First Solar, planned to invest billions of 
dollars in solar panel production in India.
The Narendra Modi-led government has been 
pushing to boost manufacturing in India since 2014, 
not just to meet domestic demand but to cater to the 
international market. In the last few years, especially 
after the Covid pandemic and geo-political tensions 
surrounding China, the world has also been looking at 
a distributed supply chain network, so much so as to 
give rise to the term ‘China Plus One’. In this context, 
the Production Linked Incentive (PLI) scheme of the 
Indian Government, the cornerstone of its ‘Make 
in India’ policy, is proving to be a game-changer. By 
giving subsidies to manufacturers setting up shop in 
India, the Government aims to boost exports, curb 
cheap imports, and generate jobs by creating global 
manufacturing powerhouses within the country. 
The electronics sector has perhaps been one of 
the biggest beneficiaries of this scheme. As per the 
quick estimates for selected major commodities for 
Page 2


Kurukshetra       September  2023 22
BS Purkyastha
P
The author is a Delhi based journalist. Email: ideainks2020@gmail.com 
The PLI Scheme 2.0 for IT Hardware is targeting total production worth Rs. 3.35 lakh crore 
and additional investment of Rs. 2,430 crore in electronics manufacturing 
India
Hub for Electronics Manufacturing
March 2023, electronic exports have become the sixth 
largest export commodity group. The target of the 
Government is to increase electronics manufacturing 
capacity to Rs. 24 lakh crore by 2025-26, which will 
also help create over 10 lakh jobs. 
Early signs of success
Today, the telecom & allied industries are among 
the top employment generators in India. From just 
two mobile phone factories in 2014, India has now 
become the second largest mobile phone producer 
in the world. Exports of mobile phones crossed a 
major milestone of $ 11 billion in 2022-23 (about Rs. 
90,000 crore). PLI Scheme for Large-Scale Electronics 
Manufacturing (LSEM) along with existing 
Phased Manufacturing Program (PMP) 
has led to increased value addition 
in the electronics sector 
and in smartphone 
manufacturing, by 
23% and 20%, 
r e spe c tiv e ly, 
from negligible 
in 2014-15. 
rime Minister Narendra Modi’s visit 
to the United States in June 2023 
coincided with US-headquartered 
Micron’s announcement to build a $ 2.7-billion 
semiconductor assembly and testing plant in India. 
The plant will produce its first chip in six quarters, i.e., 
in December 2024, creating 5,000 direct and 15,000 
indirect jobs. In the last two years or so, several 
companies, from Apple to Wistron to Foxconn, have 
firmed up plans to set up factories in India, as they 
broaden their supply chains across the globe. In 
July, news broke that US-based solar manufacturing 
company, First Solar, planned to invest billions of 
dollars in solar panel production in India.
The Narendra Modi-led government has been 
pushing to boost manufacturing in India since 2014, 
not just to meet domestic demand but to cater to the 
international market. In the last few years, especially 
after the Covid pandemic and geo-political tensions 
surrounding China, the world has also been looking at 
a distributed supply chain network, so much so as to 
give rise to the term ‘China Plus One’. In this context, 
the Production Linked Incentive (PLI) scheme of the 
Indian Government, the cornerstone of its ‘Make 
in India’ policy, is proving to be a game-changer. By 
giving subsidies to manufacturers setting up shop in 
India, the Government aims to boost exports, curb 
cheap imports, and generate jobs by creating global 
manufacturing powerhouses within the country. 
The electronics sector has perhaps been one of 
the biggest beneficiaries of this scheme. As per the 
quick estimates for selected major commodities for 
23 Kurukshetra       September  2023
Of the $ 101 billion total electronics production in FY 
2022-23, smartphones constitute $ 44 billion, including 
$ 11.1 billion as exports. Import substitution of 60% 
has been achieved in the telecom sector, and India 
has become almost self–reliant in Antennae, GPON 
(Gigabit Passive Optical Network) & CPE (Customer 
Premises Equipment). The drone sector, which consists 
of only MSME startups, has seen a seven-fold jump in 
turnover due to the PLI Scheme.
While the value of exports of electronic goods 
have increased from Rs. 39,978 crore ($ 5.96 billion) 
in 2016-17 to Rs. 1,09,797 crore in 2021-22 ($ 14.6 
billion), exhibiting a compounded annual growth rate 
(CAGR) of 22.39%, India’s share in global electronics 
manufacturing has grown from 1.3% in 2012 to 3.75% 
in FY 21-22, as per industry estimates. During April 
2022 to January 2023, electronic goods worth $ 18.78 
billion were exported.
As of March 2023, the PLI scheme for LSEM has 
attracted investment of Rs. 5,998 crore and led to 
total production worth Rs. 2,76,903 crore, including 
exports worth Rs. 1,28,886 crore. The scheme has also 
generated employment for 58,276 people. 
The PLI scheme for LSEM has attracted global 
players such as Foxconn, Samsung, Pegatron, Rising Star, 
and Wistron, as well as leading domestic companies, 
such as Lava, Micromax, Optiemus, United Telelinks, 
Neolyncs, and Padget Electronics. As of March 2023, 
PLI for IT hardware has attracted an investment of  
Rs. 195 crore and led to total production worth  
Rs. 5,715 crore. The scheme has also generated 1089 
jobs. 
Make in India Initiative: The Game-Changer
This momentous transformation in the electronics 
manufacturing sector did not happen overnight. The 
very first seedlings of this game-changing revolution 
in the Indian economy were planted with the launch 
of the Make in India initiative on 25 September 2014 
with the objective of facilitating investment, fostering 
innovation, building best-in-class manufacturing 
infrastructure, making it easy to do business, and 
enhancing skill development. The initiative is further 
aimed at creating a conducive environment for 
investment, modern and efficient infrastructure, 
opening up new sectors for foreign investment, and 
forging a partnership between the Government and 
industry through a positive mindset.
Since its launch, the Make in India initiative 
has made significant achievements and currently 
focuses on 27 sectors under Make in India 2.0. 
The Department for Promotion of Industry and 
Internal Trade is coordinating action plans for 
manufacturing sectors, while the Department of 
Commerce is coordinating service sectors. Among 
the manufacturing sectors in this list are Electronics 
System Design and Manufacturing (ESDM), while in 
the services sector there is the Information Technology 
& Information Technology enabled Services (IT &ITeS). 
In this connection, the Government has taken various 
strategic steps and initiatives to broaden and deepen 
the electronics manufacturing and information 
The Government has taken various 
strategic steps and initiatives to 
broaden and deepen the electronics 
manufacturing and information 
technology sector in the country. We 
are already witnessing India emerging 
as a trusted player in the global value 
chain of electronics and it has set itself 
a target of $ 300 billion for electronics 
manufacturing by 2025-26. 
Page 3


Kurukshetra       September  2023 22
BS Purkyastha
P
The author is a Delhi based journalist. Email: ideainks2020@gmail.com 
The PLI Scheme 2.0 for IT Hardware is targeting total production worth Rs. 3.35 lakh crore 
and additional investment of Rs. 2,430 crore in electronics manufacturing 
India
Hub for Electronics Manufacturing
March 2023, electronic exports have become the sixth 
largest export commodity group. The target of the 
Government is to increase electronics manufacturing 
capacity to Rs. 24 lakh crore by 2025-26, which will 
also help create over 10 lakh jobs. 
Early signs of success
Today, the telecom & allied industries are among 
the top employment generators in India. From just 
two mobile phone factories in 2014, India has now 
become the second largest mobile phone producer 
in the world. Exports of mobile phones crossed a 
major milestone of $ 11 billion in 2022-23 (about Rs. 
90,000 crore). PLI Scheme for Large-Scale Electronics 
Manufacturing (LSEM) along with existing 
Phased Manufacturing Program (PMP) 
has led to increased value addition 
in the electronics sector 
and in smartphone 
manufacturing, by 
23% and 20%, 
r e spe c tiv e ly, 
from negligible 
in 2014-15. 
rime Minister Narendra Modi’s visit 
to the United States in June 2023 
coincided with US-headquartered 
Micron’s announcement to build a $ 2.7-billion 
semiconductor assembly and testing plant in India. 
The plant will produce its first chip in six quarters, i.e., 
in December 2024, creating 5,000 direct and 15,000 
indirect jobs. In the last two years or so, several 
companies, from Apple to Wistron to Foxconn, have 
firmed up plans to set up factories in India, as they 
broaden their supply chains across the globe. In 
July, news broke that US-based solar manufacturing 
company, First Solar, planned to invest billions of 
dollars in solar panel production in India.
The Narendra Modi-led government has been 
pushing to boost manufacturing in India since 2014, 
not just to meet domestic demand but to cater to the 
international market. In the last few years, especially 
after the Covid pandemic and geo-political tensions 
surrounding China, the world has also been looking at 
a distributed supply chain network, so much so as to 
give rise to the term ‘China Plus One’. In this context, 
the Production Linked Incentive (PLI) scheme of the 
Indian Government, the cornerstone of its ‘Make 
in India’ policy, is proving to be a game-changer. By 
giving subsidies to manufacturers setting up shop in 
India, the Government aims to boost exports, curb 
cheap imports, and generate jobs by creating global 
manufacturing powerhouses within the country. 
The electronics sector has perhaps been one of 
the biggest beneficiaries of this scheme. As per the 
quick estimates for selected major commodities for 
23 Kurukshetra       September  2023
Of the $ 101 billion total electronics production in FY 
2022-23, smartphones constitute $ 44 billion, including 
$ 11.1 billion as exports. Import substitution of 60% 
has been achieved in the telecom sector, and India 
has become almost self–reliant in Antennae, GPON 
(Gigabit Passive Optical Network) & CPE (Customer 
Premises Equipment). The drone sector, which consists 
of only MSME startups, has seen a seven-fold jump in 
turnover due to the PLI Scheme.
While the value of exports of electronic goods 
have increased from Rs. 39,978 crore ($ 5.96 billion) 
in 2016-17 to Rs. 1,09,797 crore in 2021-22 ($ 14.6 
billion), exhibiting a compounded annual growth rate 
(CAGR) of 22.39%, India’s share in global electronics 
manufacturing has grown from 1.3% in 2012 to 3.75% 
in FY 21-22, as per industry estimates. During April 
2022 to January 2023, electronic goods worth $ 18.78 
billion were exported.
As of March 2023, the PLI scheme for LSEM has 
attracted investment of Rs. 5,998 crore and led to 
total production worth Rs. 2,76,903 crore, including 
exports worth Rs. 1,28,886 crore. The scheme has also 
generated employment for 58,276 people. 
The PLI scheme for LSEM has attracted global 
players such as Foxconn, Samsung, Pegatron, Rising Star, 
and Wistron, as well as leading domestic companies, 
such as Lava, Micromax, Optiemus, United Telelinks, 
Neolyncs, and Padget Electronics. As of March 2023, 
PLI for IT hardware has attracted an investment of  
Rs. 195 crore and led to total production worth  
Rs. 5,715 crore. The scheme has also generated 1089 
jobs. 
Make in India Initiative: The Game-Changer
This momentous transformation in the electronics 
manufacturing sector did not happen overnight. The 
very first seedlings of this game-changing revolution 
in the Indian economy were planted with the launch 
of the Make in India initiative on 25 September 2014 
with the objective of facilitating investment, fostering 
innovation, building best-in-class manufacturing 
infrastructure, making it easy to do business, and 
enhancing skill development. The initiative is further 
aimed at creating a conducive environment for 
investment, modern and efficient infrastructure, 
opening up new sectors for foreign investment, and 
forging a partnership between the Government and 
industry through a positive mindset.
Since its launch, the Make in India initiative 
has made significant achievements and currently 
focuses on 27 sectors under Make in India 2.0. 
The Department for Promotion of Industry and 
Internal Trade is coordinating action plans for 
manufacturing sectors, while the Department of 
Commerce is coordinating service sectors. Among 
the manufacturing sectors in this list are Electronics 
System Design and Manufacturing (ESDM), while in 
the services sector there is the Information Technology 
& Information Technology enabled Services (IT &ITeS). 
In this connection, the Government has taken various 
strategic steps and initiatives to broaden and deepen 
the electronics manufacturing and information 
The Government has taken various 
strategic steps and initiatives to 
broaden and deepen the electronics 
manufacturing and information 
technology sector in the country. We 
are already witnessing India emerging 
as a trusted player in the global value 
chain of electronics and it has set itself 
a target of $ 300 billion for electronics 
manufacturing by 2025-26. 
Kurukshetra       September  2023 24
technology sector in the country. We are already 
witnessing India emerging as a trusted player in the 
global value chain of electronics and it has set itself a 
target of $ 300 billion for electronics manufacturing by 
2025-26. 
In order to boost electronics manufacturing 
including that of semiconductors and position India 
as a global hub for ESDM and compete globally, 
several steps have been taken by the Government for 
electronics manufacturing in the country. The National 
Policy on Electronics 2019 provided the framework 
for encouraging and driving capabilities in the country 
for developing core components, including chipsets, 
and creating an enabling environment for the industry 
to compete globally. To attract and incentivise large 
investments in the electronics value chain and 
promote exports, the following schemes have been 
notified under the aegis of NPE 2019:
1.  Production Linked Incentive Scheme (PLI) for 
Large Scale Electronics Manufacturing (LSEM) was 
notified on 1 April 2020 to provide an incentive of 
4 -6 per cent to eligible companies on incremental 
sales (over base year) involved in mobile phone 
manufacturing and manufacturing of specified 
electronic components, including assembly, 
testing, marking, and packaging (ATMP) units. 
2.  Production Linked Incentive Scheme (PLI) for 
IT Hardware was notified on 3 March 2021 to 
provide an incentive of 4 -2 per cent/1 per cent 
on net incremental sales (over base year) of 
goods manufactured in India and covered under 
the target segment, to eligible companies, for a 
period of four years. The target segment under 
PLI scheme includes (i) laptops (ii) tablets (iii) all-
in-one PCs and (iv) servers.
3.  Scheme for Promotion of Manufacturing of 
Electronic Components and Semiconductors 
(SPECS) was notified on 1 April 2020 to provide 
financial incentive of 25 per cent on capital 
expenditure for the identified list of electronic 
goods that comprise downstream value chain of 
electronic products, i.e., electronic components, 
semiconductor/display fabrication units, ATMP 
units, specialised sub-assemblies, and capital 
goods for manufacture of aforesaid goods. 
4.  Modified Electronics Manufacturing Clusters 
(EMC 2.0) Scheme was notified on 1 April 2020 
to provide support for creation of world class 
infrastructure along with common facilities and 
amenities, including Ready Built Factory (RBF) 
sheds/Plug-and-Play facilities for attracting major 
global electronics manufacturers along with their 
supply chain to set up units in the country. The 
scheme provides financial assistance for setting 
up both EMC projects and Common Facility 
Centres (CFCs) across the country. 
5.  Programme for Development of Semiconductors 
and Display Manufacturing Ecosystem: To 
widen and deepen electronics manufacturing, 
a comprehensive programme with an outlay 
of Rs. 76,000 crore for the development of 
Semiconductors and Display manufacturing 
ecosystem has been approved. 
Fiscal Incentives Available to Eligible Applicants: 
1.  Modified Scheme for setting up of Semiconductor 
Fabs: It provides fiscal support for setting up 
semiconductor wafer fabrication facilities in the 
country. Fiscal support of 50 per cent of the 
project cost is available for setting up of silicon-
based semiconductor fabs across all technology 
nodes.
2.  Modified Scheme for setting up of Display Fabs: 
It provides fiscal support of 50 per cent of the 
project cost for setting up TFT LCD/AMOLED-
based display fabrication facilities. 
3.  Modified Scheme for setting up of Compound 
Semiconductors/Silicon Photonics/Sensors Fab/ 
Discrete Semiconductor Fabs and Semiconductor 
ATMP/OSAT facilities in India: It provides a fiscal 
support of 50 per cent of the capital expenditure to 
the eligible applicants for setting up of Compound 
Semiconductors/Silicon Photonics (SiPh)/Sensors 
With global manufacturing companies 
recognising the benefits of setting up 
factories in India to not only meet the 
pent-up demand in India but also as a 
hub for exports from India, more and 
more MNCs are evincing interest and 
trying to identify locations and local 
partners. 
Page 4


Kurukshetra       September  2023 22
BS Purkyastha
P
The author is a Delhi based journalist. Email: ideainks2020@gmail.com 
The PLI Scheme 2.0 for IT Hardware is targeting total production worth Rs. 3.35 lakh crore 
and additional investment of Rs. 2,430 crore in electronics manufacturing 
India
Hub for Electronics Manufacturing
March 2023, electronic exports have become the sixth 
largest export commodity group. The target of the 
Government is to increase electronics manufacturing 
capacity to Rs. 24 lakh crore by 2025-26, which will 
also help create over 10 lakh jobs. 
Early signs of success
Today, the telecom & allied industries are among 
the top employment generators in India. From just 
two mobile phone factories in 2014, India has now 
become the second largest mobile phone producer 
in the world. Exports of mobile phones crossed a 
major milestone of $ 11 billion in 2022-23 (about Rs. 
90,000 crore). PLI Scheme for Large-Scale Electronics 
Manufacturing (LSEM) along with existing 
Phased Manufacturing Program (PMP) 
has led to increased value addition 
in the electronics sector 
and in smartphone 
manufacturing, by 
23% and 20%, 
r e spe c tiv e ly, 
from negligible 
in 2014-15. 
rime Minister Narendra Modi’s visit 
to the United States in June 2023 
coincided with US-headquartered 
Micron’s announcement to build a $ 2.7-billion 
semiconductor assembly and testing plant in India. 
The plant will produce its first chip in six quarters, i.e., 
in December 2024, creating 5,000 direct and 15,000 
indirect jobs. In the last two years or so, several 
companies, from Apple to Wistron to Foxconn, have 
firmed up plans to set up factories in India, as they 
broaden their supply chains across the globe. In 
July, news broke that US-based solar manufacturing 
company, First Solar, planned to invest billions of 
dollars in solar panel production in India.
The Narendra Modi-led government has been 
pushing to boost manufacturing in India since 2014, 
not just to meet domestic demand but to cater to the 
international market. In the last few years, especially 
after the Covid pandemic and geo-political tensions 
surrounding China, the world has also been looking at 
a distributed supply chain network, so much so as to 
give rise to the term ‘China Plus One’. In this context, 
the Production Linked Incentive (PLI) scheme of the 
Indian Government, the cornerstone of its ‘Make 
in India’ policy, is proving to be a game-changer. By 
giving subsidies to manufacturers setting up shop in 
India, the Government aims to boost exports, curb 
cheap imports, and generate jobs by creating global 
manufacturing powerhouses within the country. 
The electronics sector has perhaps been one of 
the biggest beneficiaries of this scheme. As per the 
quick estimates for selected major commodities for 
23 Kurukshetra       September  2023
Of the $ 101 billion total electronics production in FY 
2022-23, smartphones constitute $ 44 billion, including 
$ 11.1 billion as exports. Import substitution of 60% 
has been achieved in the telecom sector, and India 
has become almost self–reliant in Antennae, GPON 
(Gigabit Passive Optical Network) & CPE (Customer 
Premises Equipment). The drone sector, which consists 
of only MSME startups, has seen a seven-fold jump in 
turnover due to the PLI Scheme.
While the value of exports of electronic goods 
have increased from Rs. 39,978 crore ($ 5.96 billion) 
in 2016-17 to Rs. 1,09,797 crore in 2021-22 ($ 14.6 
billion), exhibiting a compounded annual growth rate 
(CAGR) of 22.39%, India’s share in global electronics 
manufacturing has grown from 1.3% in 2012 to 3.75% 
in FY 21-22, as per industry estimates. During April 
2022 to January 2023, electronic goods worth $ 18.78 
billion were exported.
As of March 2023, the PLI scheme for LSEM has 
attracted investment of Rs. 5,998 crore and led to 
total production worth Rs. 2,76,903 crore, including 
exports worth Rs. 1,28,886 crore. The scheme has also 
generated employment for 58,276 people. 
The PLI scheme for LSEM has attracted global 
players such as Foxconn, Samsung, Pegatron, Rising Star, 
and Wistron, as well as leading domestic companies, 
such as Lava, Micromax, Optiemus, United Telelinks, 
Neolyncs, and Padget Electronics. As of March 2023, 
PLI for IT hardware has attracted an investment of  
Rs. 195 crore and led to total production worth  
Rs. 5,715 crore. The scheme has also generated 1089 
jobs. 
Make in India Initiative: The Game-Changer
This momentous transformation in the electronics 
manufacturing sector did not happen overnight. The 
very first seedlings of this game-changing revolution 
in the Indian economy were planted with the launch 
of the Make in India initiative on 25 September 2014 
with the objective of facilitating investment, fostering 
innovation, building best-in-class manufacturing 
infrastructure, making it easy to do business, and 
enhancing skill development. The initiative is further 
aimed at creating a conducive environment for 
investment, modern and efficient infrastructure, 
opening up new sectors for foreign investment, and 
forging a partnership between the Government and 
industry through a positive mindset.
Since its launch, the Make in India initiative 
has made significant achievements and currently 
focuses on 27 sectors under Make in India 2.0. 
The Department for Promotion of Industry and 
Internal Trade is coordinating action plans for 
manufacturing sectors, while the Department of 
Commerce is coordinating service sectors. Among 
the manufacturing sectors in this list are Electronics 
System Design and Manufacturing (ESDM), while in 
the services sector there is the Information Technology 
& Information Technology enabled Services (IT &ITeS). 
In this connection, the Government has taken various 
strategic steps and initiatives to broaden and deepen 
the electronics manufacturing and information 
The Government has taken various 
strategic steps and initiatives to 
broaden and deepen the electronics 
manufacturing and information 
technology sector in the country. We 
are already witnessing India emerging 
as a trusted player in the global value 
chain of electronics and it has set itself 
a target of $ 300 billion for electronics 
manufacturing by 2025-26. 
Kurukshetra       September  2023 24
technology sector in the country. We are already 
witnessing India emerging as a trusted player in the 
global value chain of electronics and it has set itself a 
target of $ 300 billion for electronics manufacturing by 
2025-26. 
In order to boost electronics manufacturing 
including that of semiconductors and position India 
as a global hub for ESDM and compete globally, 
several steps have been taken by the Government for 
electronics manufacturing in the country. The National 
Policy on Electronics 2019 provided the framework 
for encouraging and driving capabilities in the country 
for developing core components, including chipsets, 
and creating an enabling environment for the industry 
to compete globally. To attract and incentivise large 
investments in the electronics value chain and 
promote exports, the following schemes have been 
notified under the aegis of NPE 2019:
1.  Production Linked Incentive Scheme (PLI) for 
Large Scale Electronics Manufacturing (LSEM) was 
notified on 1 April 2020 to provide an incentive of 
4 -6 per cent to eligible companies on incremental 
sales (over base year) involved in mobile phone 
manufacturing and manufacturing of specified 
electronic components, including assembly, 
testing, marking, and packaging (ATMP) units. 
2.  Production Linked Incentive Scheme (PLI) for 
IT Hardware was notified on 3 March 2021 to 
provide an incentive of 4 -2 per cent/1 per cent 
on net incremental sales (over base year) of 
goods manufactured in India and covered under 
the target segment, to eligible companies, for a 
period of four years. The target segment under 
PLI scheme includes (i) laptops (ii) tablets (iii) all-
in-one PCs and (iv) servers.
3.  Scheme for Promotion of Manufacturing of 
Electronic Components and Semiconductors 
(SPECS) was notified on 1 April 2020 to provide 
financial incentive of 25 per cent on capital 
expenditure for the identified list of electronic 
goods that comprise downstream value chain of 
electronic products, i.e., electronic components, 
semiconductor/display fabrication units, ATMP 
units, specialised sub-assemblies, and capital 
goods for manufacture of aforesaid goods. 
4.  Modified Electronics Manufacturing Clusters 
(EMC 2.0) Scheme was notified on 1 April 2020 
to provide support for creation of world class 
infrastructure along with common facilities and 
amenities, including Ready Built Factory (RBF) 
sheds/Plug-and-Play facilities for attracting major 
global electronics manufacturers along with their 
supply chain to set up units in the country. The 
scheme provides financial assistance for setting 
up both EMC projects and Common Facility 
Centres (CFCs) across the country. 
5.  Programme for Development of Semiconductors 
and Display Manufacturing Ecosystem: To 
widen and deepen electronics manufacturing, 
a comprehensive programme with an outlay 
of Rs. 76,000 crore for the development of 
Semiconductors and Display manufacturing 
ecosystem has been approved. 
Fiscal Incentives Available to Eligible Applicants: 
1.  Modified Scheme for setting up of Semiconductor 
Fabs: It provides fiscal support for setting up 
semiconductor wafer fabrication facilities in the 
country. Fiscal support of 50 per cent of the 
project cost is available for setting up of silicon-
based semiconductor fabs across all technology 
nodes.
2.  Modified Scheme for setting up of Display Fabs: 
It provides fiscal support of 50 per cent of the 
project cost for setting up TFT LCD/AMOLED-
based display fabrication facilities. 
3.  Modified Scheme for setting up of Compound 
Semiconductors/Silicon Photonics/Sensors Fab/ 
Discrete Semiconductor Fabs and Semiconductor 
ATMP/OSAT facilities in India: It provides a fiscal 
support of 50 per cent of the capital expenditure to 
the eligible applicants for setting up of Compound 
Semiconductors/Silicon Photonics (SiPh)/Sensors 
With global manufacturing companies 
recognising the benefits of setting up 
factories in India to not only meet the 
pent-up demand in India but also as a 
hub for exports from India, more and 
more MNCs are evincing interest and 
trying to identify locations and local 
partners. 
25 Kurukshetra       September  2023
(including MEMS) Fab/ Discrete Semiconductor 
Fabs, and Semiconductor ATMP/ OSAT facilities in 
India. 
4.  Design Linked Incentive Scheme: It offers financial 
incentives, design infrastructure support across 
various stages of development and deployment 
of semiconductor design for ICs, Chipsets, SoCs, 
Systems & IP Cores, and semiconductor linked 
design. The scheme provides both ‘Product 
Design Linked Incentive’ and ‘Deployment Linked 
Incentive’.
PLI Scheme 2.0 for IT Hardware 
With global manufacturing companies recognising 
the benefits of setting up factories in India to not only 
meet the pent-up demand in India but also as a hub for 
exports from India, more and more MNCs are evincing 
interest and trying to identify locations and local 
partners. To make it more conducive, the Government, 
earlier this year, came up with the Production-
Linked Incentive (PLI) Scheme 2.0 for IT Hardware 
for enhancing India’s manufacturing capabilities 
The PLI Scheme 2.0 for IT Hardware is 
expected to result in broadening and deepening 
of the manufacturing ecosystem by encouraging 
the localisation of components, sub-assemblies 
and allowing for a longer duration to develop the 
supply chain within the country. Additionally, the 
scheme provides increased flexibility and options 
for applicants, and is tied to incremental sales and 
investment thresholds to further incentivise growth. 
Furthermore, semiconductor design, IC manufacturing, 
and packaging are also included as incentivised 
components of the PLI Scheme 2.0 for IT Hardware.
The scheme is expected to lead to total 
production worth Rs. 3.35 lakh crore, bring an 
additional investment of Rs. 2,430 crore in electronics 
manufacturing and lead to generation of 75,000 
additional direct jobs. The scheme will promote large 
scale manufacturing in laptops, tablets, all-in-one PCs, 
servers and Ultra Small Form Factor (USFF) devices 
and contribute significantly to achieve electronics 
manufacturing turnover of $ 300 billion by 2025-26.
Digital India Mission 
The Digital India mission is a 
programme to transform India into 
a digitally empowered society and 
knowledge economy. The umbrella 
scheme has been pivotal in generating 
employment across all domains. 
Electronics manufacturing is an 
important pillar of the Digital India 
mission. As part of this mission, MeitY 
has launched several notable schemes 
that are catalysing the growth of 
the country’s electronics ecosystem. 
In addition, MeitY has approved 
two schemes for skill development 
in Electronics System Design and 
Manufacturing (ESDM) sector: Scheme 
for Financial Assistance to select 
States/UTs for Skill Development in 
Electronics System Design and Manufacturing (ESDM) 
sector (Scheme-1) and Skill Development in ESDM 
for Digital India (Scheme-2) to facilitate the creation 
of an ecosystem for the development of the ESDM 
sector. Both schemes are being run concurrently; and, 
schemes are being implemented by training partners 
affiliated with key implementing agencies (ESSCI/
NIELIT/TSSC/HSSC). 
and enhancing exports with a budgetary outlay of 
Rs.17,000 crore. The window of applications under PLI 
Scheme 2.0 for IT Hardware opened on 1 June 2023. 
The scheme has three categories of applicants: global 
companies, hybrid (global/domestic) companies, and 
domestic companies. Approved applicants of existing 
PLI will be allowed to apply under PLI 2.0.
Page 5


Kurukshetra       September  2023 22
BS Purkyastha
P
The author is a Delhi based journalist. Email: ideainks2020@gmail.com 
The PLI Scheme 2.0 for IT Hardware is targeting total production worth Rs. 3.35 lakh crore 
and additional investment of Rs. 2,430 crore in electronics manufacturing 
India
Hub for Electronics Manufacturing
March 2023, electronic exports have become the sixth 
largest export commodity group. The target of the 
Government is to increase electronics manufacturing 
capacity to Rs. 24 lakh crore by 2025-26, which will 
also help create over 10 lakh jobs. 
Early signs of success
Today, the telecom & allied industries are among 
the top employment generators in India. From just 
two mobile phone factories in 2014, India has now 
become the second largest mobile phone producer 
in the world. Exports of mobile phones crossed a 
major milestone of $ 11 billion in 2022-23 (about Rs. 
90,000 crore). PLI Scheme for Large-Scale Electronics 
Manufacturing (LSEM) along with existing 
Phased Manufacturing Program (PMP) 
has led to increased value addition 
in the electronics sector 
and in smartphone 
manufacturing, by 
23% and 20%, 
r e spe c tiv e ly, 
from negligible 
in 2014-15. 
rime Minister Narendra Modi’s visit 
to the United States in June 2023 
coincided with US-headquartered 
Micron’s announcement to build a $ 2.7-billion 
semiconductor assembly and testing plant in India. 
The plant will produce its first chip in six quarters, i.e., 
in December 2024, creating 5,000 direct and 15,000 
indirect jobs. In the last two years or so, several 
companies, from Apple to Wistron to Foxconn, have 
firmed up plans to set up factories in India, as they 
broaden their supply chains across the globe. In 
July, news broke that US-based solar manufacturing 
company, First Solar, planned to invest billions of 
dollars in solar panel production in India.
The Narendra Modi-led government has been 
pushing to boost manufacturing in India since 2014, 
not just to meet domestic demand but to cater to the 
international market. In the last few years, especially 
after the Covid pandemic and geo-political tensions 
surrounding China, the world has also been looking at 
a distributed supply chain network, so much so as to 
give rise to the term ‘China Plus One’. In this context, 
the Production Linked Incentive (PLI) scheme of the 
Indian Government, the cornerstone of its ‘Make 
in India’ policy, is proving to be a game-changer. By 
giving subsidies to manufacturers setting up shop in 
India, the Government aims to boost exports, curb 
cheap imports, and generate jobs by creating global 
manufacturing powerhouses within the country. 
The electronics sector has perhaps been one of 
the biggest beneficiaries of this scheme. As per the 
quick estimates for selected major commodities for 
23 Kurukshetra       September  2023
Of the $ 101 billion total electronics production in FY 
2022-23, smartphones constitute $ 44 billion, including 
$ 11.1 billion as exports. Import substitution of 60% 
has been achieved in the telecom sector, and India 
has become almost self–reliant in Antennae, GPON 
(Gigabit Passive Optical Network) & CPE (Customer 
Premises Equipment). The drone sector, which consists 
of only MSME startups, has seen a seven-fold jump in 
turnover due to the PLI Scheme.
While the value of exports of electronic goods 
have increased from Rs. 39,978 crore ($ 5.96 billion) 
in 2016-17 to Rs. 1,09,797 crore in 2021-22 ($ 14.6 
billion), exhibiting a compounded annual growth rate 
(CAGR) of 22.39%, India’s share in global electronics 
manufacturing has grown from 1.3% in 2012 to 3.75% 
in FY 21-22, as per industry estimates. During April 
2022 to January 2023, electronic goods worth $ 18.78 
billion were exported.
As of March 2023, the PLI scheme for LSEM has 
attracted investment of Rs. 5,998 crore and led to 
total production worth Rs. 2,76,903 crore, including 
exports worth Rs. 1,28,886 crore. The scheme has also 
generated employment for 58,276 people. 
The PLI scheme for LSEM has attracted global 
players such as Foxconn, Samsung, Pegatron, Rising Star, 
and Wistron, as well as leading domestic companies, 
such as Lava, Micromax, Optiemus, United Telelinks, 
Neolyncs, and Padget Electronics. As of March 2023, 
PLI for IT hardware has attracted an investment of  
Rs. 195 crore and led to total production worth  
Rs. 5,715 crore. The scheme has also generated 1089 
jobs. 
Make in India Initiative: The Game-Changer
This momentous transformation in the electronics 
manufacturing sector did not happen overnight. The 
very first seedlings of this game-changing revolution 
in the Indian economy were planted with the launch 
of the Make in India initiative on 25 September 2014 
with the objective of facilitating investment, fostering 
innovation, building best-in-class manufacturing 
infrastructure, making it easy to do business, and 
enhancing skill development. The initiative is further 
aimed at creating a conducive environment for 
investment, modern and efficient infrastructure, 
opening up new sectors for foreign investment, and 
forging a partnership between the Government and 
industry through a positive mindset.
Since its launch, the Make in India initiative 
has made significant achievements and currently 
focuses on 27 sectors under Make in India 2.0. 
The Department for Promotion of Industry and 
Internal Trade is coordinating action plans for 
manufacturing sectors, while the Department of 
Commerce is coordinating service sectors. Among 
the manufacturing sectors in this list are Electronics 
System Design and Manufacturing (ESDM), while in 
the services sector there is the Information Technology 
& Information Technology enabled Services (IT &ITeS). 
In this connection, the Government has taken various 
strategic steps and initiatives to broaden and deepen 
the electronics manufacturing and information 
The Government has taken various 
strategic steps and initiatives to 
broaden and deepen the electronics 
manufacturing and information 
technology sector in the country. We 
are already witnessing India emerging 
as a trusted player in the global value 
chain of electronics and it has set itself 
a target of $ 300 billion for electronics 
manufacturing by 2025-26. 
Kurukshetra       September  2023 24
technology sector in the country. We are already 
witnessing India emerging as a trusted player in the 
global value chain of electronics and it has set itself a 
target of $ 300 billion for electronics manufacturing by 
2025-26. 
In order to boost electronics manufacturing 
including that of semiconductors and position India 
as a global hub for ESDM and compete globally, 
several steps have been taken by the Government for 
electronics manufacturing in the country. The National 
Policy on Electronics 2019 provided the framework 
for encouraging and driving capabilities in the country 
for developing core components, including chipsets, 
and creating an enabling environment for the industry 
to compete globally. To attract and incentivise large 
investments in the electronics value chain and 
promote exports, the following schemes have been 
notified under the aegis of NPE 2019:
1.  Production Linked Incentive Scheme (PLI) for 
Large Scale Electronics Manufacturing (LSEM) was 
notified on 1 April 2020 to provide an incentive of 
4 -6 per cent to eligible companies on incremental 
sales (over base year) involved in mobile phone 
manufacturing and manufacturing of specified 
electronic components, including assembly, 
testing, marking, and packaging (ATMP) units. 
2.  Production Linked Incentive Scheme (PLI) for 
IT Hardware was notified on 3 March 2021 to 
provide an incentive of 4 -2 per cent/1 per cent 
on net incremental sales (over base year) of 
goods manufactured in India and covered under 
the target segment, to eligible companies, for a 
period of four years. The target segment under 
PLI scheme includes (i) laptops (ii) tablets (iii) all-
in-one PCs and (iv) servers.
3.  Scheme for Promotion of Manufacturing of 
Electronic Components and Semiconductors 
(SPECS) was notified on 1 April 2020 to provide 
financial incentive of 25 per cent on capital 
expenditure for the identified list of electronic 
goods that comprise downstream value chain of 
electronic products, i.e., electronic components, 
semiconductor/display fabrication units, ATMP 
units, specialised sub-assemblies, and capital 
goods for manufacture of aforesaid goods. 
4.  Modified Electronics Manufacturing Clusters 
(EMC 2.0) Scheme was notified on 1 April 2020 
to provide support for creation of world class 
infrastructure along with common facilities and 
amenities, including Ready Built Factory (RBF) 
sheds/Plug-and-Play facilities for attracting major 
global electronics manufacturers along with their 
supply chain to set up units in the country. The 
scheme provides financial assistance for setting 
up both EMC projects and Common Facility 
Centres (CFCs) across the country. 
5.  Programme for Development of Semiconductors 
and Display Manufacturing Ecosystem: To 
widen and deepen electronics manufacturing, 
a comprehensive programme with an outlay 
of Rs. 76,000 crore for the development of 
Semiconductors and Display manufacturing 
ecosystem has been approved. 
Fiscal Incentives Available to Eligible Applicants: 
1.  Modified Scheme for setting up of Semiconductor 
Fabs: It provides fiscal support for setting up 
semiconductor wafer fabrication facilities in the 
country. Fiscal support of 50 per cent of the 
project cost is available for setting up of silicon-
based semiconductor fabs across all technology 
nodes.
2.  Modified Scheme for setting up of Display Fabs: 
It provides fiscal support of 50 per cent of the 
project cost for setting up TFT LCD/AMOLED-
based display fabrication facilities. 
3.  Modified Scheme for setting up of Compound 
Semiconductors/Silicon Photonics/Sensors Fab/ 
Discrete Semiconductor Fabs and Semiconductor 
ATMP/OSAT facilities in India: It provides a fiscal 
support of 50 per cent of the capital expenditure to 
the eligible applicants for setting up of Compound 
Semiconductors/Silicon Photonics (SiPh)/Sensors 
With global manufacturing companies 
recognising the benefits of setting up 
factories in India to not only meet the 
pent-up demand in India but also as a 
hub for exports from India, more and 
more MNCs are evincing interest and 
trying to identify locations and local 
partners. 
25 Kurukshetra       September  2023
(including MEMS) Fab/ Discrete Semiconductor 
Fabs, and Semiconductor ATMP/ OSAT facilities in 
India. 
4.  Design Linked Incentive Scheme: It offers financial 
incentives, design infrastructure support across 
various stages of development and deployment 
of semiconductor design for ICs, Chipsets, SoCs, 
Systems & IP Cores, and semiconductor linked 
design. The scheme provides both ‘Product 
Design Linked Incentive’ and ‘Deployment Linked 
Incentive’.
PLI Scheme 2.0 for IT Hardware 
With global manufacturing companies recognising 
the benefits of setting up factories in India to not only 
meet the pent-up demand in India but also as a hub for 
exports from India, more and more MNCs are evincing 
interest and trying to identify locations and local 
partners. To make it more conducive, the Government, 
earlier this year, came up with the Production-
Linked Incentive (PLI) Scheme 2.0 for IT Hardware 
for enhancing India’s manufacturing capabilities 
The PLI Scheme 2.0 for IT Hardware is 
expected to result in broadening and deepening 
of the manufacturing ecosystem by encouraging 
the localisation of components, sub-assemblies 
and allowing for a longer duration to develop the 
supply chain within the country. Additionally, the 
scheme provides increased flexibility and options 
for applicants, and is tied to incremental sales and 
investment thresholds to further incentivise growth. 
Furthermore, semiconductor design, IC manufacturing, 
and packaging are also included as incentivised 
components of the PLI Scheme 2.0 for IT Hardware.
The scheme is expected to lead to total 
production worth Rs. 3.35 lakh crore, bring an 
additional investment of Rs. 2,430 crore in electronics 
manufacturing and lead to generation of 75,000 
additional direct jobs. The scheme will promote large 
scale manufacturing in laptops, tablets, all-in-one PCs, 
servers and Ultra Small Form Factor (USFF) devices 
and contribute significantly to achieve electronics 
manufacturing turnover of $ 300 billion by 2025-26.
Digital India Mission 
The Digital India mission is a 
programme to transform India into 
a digitally empowered society and 
knowledge economy. The umbrella 
scheme has been pivotal in generating 
employment across all domains. 
Electronics manufacturing is an 
important pillar of the Digital India 
mission. As part of this mission, MeitY 
has launched several notable schemes 
that are catalysing the growth of 
the country’s electronics ecosystem. 
In addition, MeitY has approved 
two schemes for skill development 
in Electronics System Design and 
Manufacturing (ESDM) sector: Scheme 
for Financial Assistance to select 
States/UTs for Skill Development in 
Electronics System Design and Manufacturing (ESDM) 
sector (Scheme-1) and Skill Development in ESDM 
for Digital India (Scheme-2) to facilitate the creation 
of an ecosystem for the development of the ESDM 
sector. Both schemes are being run concurrently; and, 
schemes are being implemented by training partners 
affiliated with key implementing agencies (ESSCI/
NIELIT/TSSC/HSSC). 
and enhancing exports with a budgetary outlay of 
Rs.17,000 crore. The window of applications under PLI 
Scheme 2.0 for IT Hardware opened on 1 June 2023. 
The scheme has three categories of applicants: global 
companies, hybrid (global/domestic) companies, and 
domestic companies. Approved applicants of existing 
PLI will be allowed to apply under PLI 2.0.
Kurukshetra       September  2023 26
Under both the schemes, as on 1 March 2023, 
a total of 4,35,165 candidates have been enrolled 
and 4,28,540 candidates have been trained, out of 
which 3,11,862 have been certified. Further, the C2S 
Programme has also been initiated by MeitY with 
an aim to generate 85,000 industry-ready workers 
specialised in the area of VLSI and Embedded System 
Design. This programme will help to advance in the 
ESDM space by way of inculcating the culture of Chip/ 
System-on-Chip (SoC)/ System Level Design at BTech, 
MTech & PhD level and will act as a catalyst for the 
growth of startups involved in semiconductor design, 
thereby promoting entrepreneurship in chip design 
area in the country.
Looking Ahead
The PLI schemes for LSEM and for IT hardware 
are helping make India a competitive destination 
for electronics manufacturing and providing a boost 
to Aatmanirbhar Bharat while creating more global 
champions in this sector. India now ranks 63
rd
 in the 
world for manufacturing, up 23 places from a few 
years ago, according to the World Economic Forum’s 
Global Competitiveness Index. The key sectors in 
India’s manufacturing ecosystem include automobiles, 
pharmaceuticals, electronics, and textiles. With over 
27.3 million workers, the manufacturing sector plays a 
major role in the Indian economy. 
Still, there are several roadblocks on the path 
to becoming a global manufacturing powerhouse. 
The biggest one is infrastructure, such as insufficient 
and poor quality roads and ports, which can hinder 
the movement of goods and increase the cost of 
manufacturing. Again, bureaucratic red tape and 
a complex taxation system can make it difficult for 
companies to do business in India. The scarcity of 
skilled labour is another major concern. While many 
a multinational expresses interest in setting up 
manufacturing facilities in India and several state-level 
meetings happen with announcements of investment 
plans, it is a long and meandering path to the actual 
inflow of foreign direct investment and commencement 
of operations. Both domestic partners as well as the 
Government need to go out of their way to make sure 
that the overall experience of investors in setting up a 
manufacturing base in India is smooth. It needs to be 
acknowledged that the government has been working 
on addressing the pain points of multiple legal hassles 
and approvals. For instance, the requirement of 38 
approvals has now come down to 12 with the focus on 
ease of doing business. This is a welcome move, but 
more has to be done to speed up the process further.
Given the current global environment and the 
need for multinational brands to look beyond China 
for manufacturing hubs, India has a window of three 
to five years to seize this opportunity to attract 
investments and emerge as a credible global supply 
chain alternative. The current desire of Western 
economies to scout for manufacturing opportunities 
beyond China notwithstanding, we need to remember 
that our formidable neighbour’s economy is about five 
times larger with a GDP of $ 18.1 trillion as opposed 
to India’s GDP of $ 3.39 trillion. The Economic Survey 
2022–23 stated that India’s manufacturing sector 
accounts for about 16 per cent of the country’s GDP , 
and the target is to take it to 25 per cent by 2025. 
The survey also underlined three primary assets 
to capitalise on this opportunity: The potential for 
significant domestic demand, improved measures by 
the Government to encourage manufacturing, and a 
distinct demographic edge. We will need to work on 
all three, concurrently and aggressively, to ensure that 
this opportunity is not lost.  ?
References
1.  Press Information Bureau
2.  Ministry of Electronics and Information 
Technology